The Hindu Business Line : World Gold Council tying up with micro finance institutions

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World Gold Council tying up with micro finance institutions

For financing gold purchases in rural areas

All that glitters
WGC is extending finance to 2,000 people around Kochi.
Plans afoot to extend this scheme to other parts of Kerala and Tamil Nadu.
In talks with ICICI Bank for a tie-up in urban areas.

Our Bureau

Hyderabad, Dec 21 World Gold Council-India is planning to rope in micro finance institutions (MFIs) across the country to offer finance to lower income groups for buying gold in small quantities.

Encouraged by a project launched in Kerala in collaboration with Muthoot Group, the Council is now actively scouting for MFI partners to launch similar programmes across the country, Mr Ajay Mitra, Managing Director – India, World Gold Council, told Business Line here.

“About 2,000 individuals from lower income groups have been extended finance six months ago in and around Kochi to buy gold and there has been a single default instance till now,” Mr Mitra said.

Plans were afoot to extend the scheme to other parts of Kerala and Tamil Nadu before the end of the current fiscal and to other regions across the country in about a year, he added.

To encourage gold purchase through finance in the urban areas, the Council is currently in talks with the ICICI Bank. “No agreements have been reached so far,” the World Gold Council official said.

The objective is to encourage gold consumption and aptitude for investing in/wearing gold jewellery. “We don’t get any revenue out of these tie-ups as ours is a non-profit body. Instead, we incur expenditure as we fund a part of the marketing expenses for the schemes,” he added.

Further, the council is also working on promoting the use of gold jewellery among young girls in the country. “The gold consumption by young girls in India is very low as of now. We are on a mission to bring a mindset shift in the youth about making a fashion statement with gold jewellery,” Mr Keyur Shah, Associate Director, World Gold Council, said.

On the trends in the industry, Mr Shah said there had been a gradual shift towards emergence of national players. “The industry is highly unorganised with over five lakh small and individual players. It is now being understood that consolidation is a must to leverage global markets and increase our jewellery exports. Though we have a few national players like Tanishq, the number would go up over next two/three years,” he opined.

India now ranks first in gold consumption in the world with annual demand of over 722 tonnes followed by China and the US with an annual growth rate of 20 per cent for the last three years, he added.

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